Young, 47, moved to Wasps from Cardiff Blues in 2011. During a successful playing career, he won 51 Wales caps and featured in three Tests for the British and Irish Lions. He also played rugby league for Leeds, Salford and won 14 international caps during a six-year stint in the 13-man game.

Wasps are currently fourth in the Premiership after making a flying start to life at their new Ricoh Arena base in Coventry by scoring 40 points against both London Irish and Sale Sharks.

” I am very pleased to have extended my contract and I am excited about the squad we are building here,” Young said.

” Life is never dull at Wasps, and it has been a rollercoaster ride during my four years here to date.

“However, since (owner) Derek Richardson came on board, we finally have security and are now in a position to plan for the future and invest in our squad and training facilities.

“We own our own home, which is one of the most extensive facilities in world rugby, we are on course to build world-class training facilities and I fully expect to be able to attract more world-class players in the years to come.

” It’s fantastic to see so many of our current squad committing to the club and being excited to be part of Wasps’ future.

“I truly believe we have the potential to develop into a top-four team over the next couple of seasons, and we hope to be in a position to announce some new signings in the next couple of weeks.”

Wasps chief executive Nick Eastwood paid tribute to Young and his work with the club.

“T here are very few directors of rugby in the game who would have been able to handle so well what’s been thrown at him since joining Wasps,” Eastwood said.

“He has fought off relegation and kept the squad fully focused during off-field financial difficulties, with the result that he and his coaching team have guided the squad from 11th to eighth to seventh in successive seasons in the Aviva Premiership, and currently sit in the top four.

“Over that time, he has recruited shrewdly and performed the role of both director of rugby and head coach.

“I would like to take this opportunity to thank Dai publicly for going beyond the traditional remit of a director of rugby to keep this club and squad together over the past few years, and for achieving everything he has in testing circumstances.”

Wasps announced their second signing in 24 hours with confirmation that scrum-half Dan Robson will head to the club from Gloucester for next season.

Robson, 22, was part of England’s Grand Slam-winning Under-20 squad in 2011, and he has made more than 50 Premiership appearances in Gloucester colours. Robson has also represented England Saxons.

His recruitment follows that of Leinster fly-half Jimmy Gopperth, who will also move to Wasps at the end of this term.

Young said: “Dan is quick around the breakdown, has a great turn of pace and a really good kicking game.

“We are already strong in the scrum-half department and, in my opinion, this season Joe Simpson has been playing some of the best rugby of his career.

“But signing a player of Dan’s potential and skill level will only help to raise the standard and competition for places even further, and get the best out of the squad as we look to take the club to the next level in the Aviva Premiership.”